Analysts are optimistic about the system's future, especially as an increasing number of consumers are becoming more computer savvy.

According to Lehman Brothers and comScore Media Metrix, VoIP telephony revenues are set to nearly double to almost $8bn over the next few years.

International Data Group estimates that up to 11% of UK broadband users will have a VoIP service by 2007.

Skype reckons that more than 2 million people are using its software at any given moment, adding that the free program has been downloaded more than 151 million times since it was introduced in 2003.

The company does not release earnings figures.

Vonage, the largest internet phone company, has close to 1 million subscribers who pay $25 a month to use its service.

'Big move away'

Despite the optimism surrounding VoIP services, analysts were less happy about the fact that eBay may be bidding for Skype.

"I don't see a lot of point to eBay buying Skype," said Martin Pyykkonen, an analyst at Hoefer Arnett.

"If eBay were to make this sort of move it would basically be admitting that 'our core market is decelerating.'"

EBay's shares dropped almost 4% to $38.93 on Thursday as the rumours about its bid swirled.

The company has been buying up firms - including payment system PayPal - in an effort to increase the number of services it offers consumers and keep profit growth.

Media reports speculate that as well as looking to tap into the growing internet phone market, eBay is also attracted by the idea of letting its buyers and sellers talk to each other via their computers.

"This would be a big move away from the auction business for eBay," said Jeff Kagan, an independent telecoms analyst. "It could be a sign of a change in strategy for the company as the telecoms industry begins to explode again."

Skype has options other than being bought out, and has hired Morgan Stanley to look at all its possibilities including a stock market floatation.